EV Battery Charging At Public Stations To Attract 18% GST: Karnataka ARR

Charging electric vehicles (EV) batteries at public stations will attract 18% GST, Karnataka Authority for Advance Ruling said.

The matter came up when Chamundeshwari Electricity Supply Corporation Ltd wanted to set up public charging stations (PCS) on its own for charging both two-wheeler and four-wheeler EVs.

The body sought clarity on whether EV battery charging services would come under GST ambit. It also asked the ARR whether energy charges can be treated as exempt as per the GST law as it is a supply of goods, while GST is levied only on service charges as supply of services.

In its clarification, ARR said that the charging of a battery involved utilisation of electrical energy for its conversion to chemical energy, which gets stored in the battery. As it does not involve any sale of electricity to any person as electricity is consumed within the premises owned by the charging station, it is not required to obtain a licence under the Electricity Act for charging stations.

It also added charging an EV does not include the sale of electricity to any person as the electricity is consumed within the premises owned by the charging station and held that the activity of charging an EV is not a supply of electricity or a supply of any moveable property, but a supply of service.

Hence, ‘supply of electrical energy’ and ‘service charges’ together to be treated as supply of service, ARR said, adding that it would attract a GST rate of 18%.

Currently, around 9,000 petrol pumps in India provide EV charging facilities, according to data from the Ministry of Petroleum and Natural Gas. The number of fueling stations offering electric charging facilities has risen significantly from 3,423 in 2022 to 8,853 at the beginning of June. 

Meanwhile, total EV registrations grew to 1,57,217 units in May from 1,10,997 in April. The total number of EV registrations in the country stood at 6,19,172 so far in 2023.